Recognition of Profit on Long-Term Contracts) During 2022, Nilsen Company started a construction job with a contract price of $1,600,000. The job was completed in 2024. The following information is available # Item 2022 2023 2024 1 Costs incurred to date 400,000 825,000 1,070,000 2 Estimated costs to complete 600,000 275,000 - 3 Billings to date 300,000 900,000 1,600,000 4 Collections to date 270,000 810,000 1,425,000 Instructions a. Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. b. Prepare all necessary journal entries for 2023.
Recognition of Profit on Long-Term Contracts) During 2022, Nilsen Company started a construction job with a contract price of $1,600,000. The job was completed in 2024. The following information is available # Item 2022 2023 2024 1 Costs incurred to date 400,000 825,000 1,070,000 2 Estimated costs to complete 600,000 275,000 - 3 Billings to date 300,000 900,000 1,600,000 4 Collections to date 270,000 810,000 1,425,000 Instructions a. Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. b. Prepare all necessary journal entries for 2023.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
(Recognition of Profit on Long-Term Contracts) During 2022, Nilsen Company started a construction job with a contract price of $1,600,000. The job was completed in 2024. The following information is available # Item 2022 2023 2024 1 Costs incurred to date 400,000 825,000 1,070,000 2 Estimated costs to complete 600,000 275,000 - 3 Billings to date 300,000 900,000 1,600,000 4 Collections to date 270,000 810,000 1,425,000 Instructions a. Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. b. Prepare all necessary journal entries for 2023.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education